Planograms – Meaning, its Need and Types of Product Placements
How do you think buildings are constructed? With the help of architectural drawings. An architectural drawing creates a rough print of the building on paper which gives an idea about the floor plans, location of rooms, lobby and so on. In retail a planogram replaces architectural drawings. Once a retailer opens a store, he needs […]
Importance of Market Research to Organizations in an Age of Unpredictability
Market Research in the Age of Unpredictability We are living in an age of unpredictability. With sales forecasts and marketing projections going haywire, organizations find themselves unable to have a “grip on the present” and a “vision for the future”. Further, they also find that any forecast or projections about consumer behavior invariably turns out […]
Changing Media Landscapes and their Impact on Society
In previous articles, we have discussed how media affects society and effects changes in the way people think and act. This article looks at how the historical function of media as a watchdog and a purveyor of public good have now evolved to a point where the media sets the agenda for the country to […]
Co-branding – Meaning, Types and Advantages and Disadvantages
What is Co-branding Co branding is the utilization of two or more brands to name a new product. The ingredient brands help each other to achieve their aims. The overall synchronization between the brand pair and the new product has to be kept in mind. Example of co-branding – Citibank co-branded with MTV to launch […]
How Contemporary Corporate Philanthropy Works and Its Impact on Societies
The Why and How of Corporate Philanthropy Corporate and business leaders often have humanitarian urges and instincts to help society after they have achieved a certain amount of success in their professional careers and fulfillment in their personal lives. Indeed, most corporate and business leaders once they have become legends often have an attitude of […]
When one refers to International Retail business, the comparison is mainly referring to the European and US markets. ECR or Efficient Consumer Response initiatives in the 1990s changed the face of the International Retailing business in Europe as well as US.
The studies covering the entire supply chain from suppliers to the end consumer were carried out in both the regions and solutions were designed. However the way that the regions reacted to adapting the supply chain solutions and the rate of absorption as well as change was different between the two geographies.
Europe took to ECR implementation whole heartedly and benefitted through innovation. Tesco and Sainsbury who were one of the earliest adaptors of ECR managed to save several hundred millions of pounds by reworking their supply chain solutions and re-engineering the entire process as well as strategy from procurement, manufacturing to logistics and retail store outlets.
Overall the ECR implementation was embraced effectively by UK, France and German Companies. ECR process reduced the overall inventory holding to 25 days, while in the US the inventory holding remained as high as 61 days stocks. Overall the response from US was poor as compared to Europe. The reasons could be attributed to the fact that both Europe and US are very different markets and the trading environments too are varied.
The grocery trade is highly concentrated in Europe while in the US it is fragmented. Secondly the fashion industry in Europe is well developed and mature in terms of fashion designers as well as labels while in the US the industry is not highly structured.
When it comes to sourcing and the equation with manufacturers, both the markets function in different ways. US on the other hand tends to be more advanced in marketing and sales promotional activities as well as consumer relationship management activities which is not adapted aggressively by the European markets.
Further comparison of Europe and US retail market brings out the differences in terms of local culture as well as consumer choices too. US market tends to have larger spread of area for the stores while in Europe there are restrictions with reference to the location as well as the size of the stores.
US stores are more flexible in the stores operations and timings while in Europe the store timings are strictly followed giving lesser choice to consumers. Studies and surveys have also brought out the fact that the consumer behaviours in both the regions are different.
The US citizens generally seem to buy groceries and shop for food items in bulk. They tend to hold inventories in the garage or basement which could explain the reason for higher inventory build up in the supply chains.
Europeans on the other hand do not have the right kind of large format stores that encourage such bulk buying and hence the trends are different.
The need for supply chain solutions vary between Europe and US.
Europe consists of several formats of retail trade outlets from super markets, mega stores to super stores and hyper markets.
US generally have super market and large format stores that stocks and sells all items under one roof.
European network of super markets and stores as well as the manufacturers and supplier locations being spread all over, the supply chain solution has evolved around the concept of building Regional Distribution Centres which warehouse in bulk and distribute to the stores on call basis or as per schedule.
In the US, the supplies are predominantly based on import and the local supplies are affected to the large format stores directly.
In all respects we find that the European markets and consumers are different from the US markets and consumers. Therefore both the regions have had their unique ways of evolving and responding to market conditions as far as the supply chain solutions and ECR initiatives are concerned.
Your email address will not be published. Required fields are marked *
International Retail Store Design Principles – The Principle of Totality
February 12, 2025
